A Criticism of Neoliberal Policies as a Method of Development

* Neoliberalism is a philosophical theory that uses market value as the primary method of evaluating all aspects of life. Thus, the market is seen as the template for all other activities within a society, even those that involve an ethical dimension. (Paul Sukys, 2009)

Thesis Statement: The pro-market principles that neoliberalism encourages do have benefits that, if managed realistically, are means of development and sustainment for countries worldwide.

* “The neoliberal doctrine emphasizes competition over cooperation and in doing so encourages each individual to pursue his or her own well being, thus effectively creating "companies of one" who will sell whatever they possess (talents, property, abilities, education, and so on) in order to accumulate "points," in whatever way those points may be defined within a given system.” (Jason Read, 2008) * “Neoliberalization has not been very effective in revitalizing global capital accumulation, but it has succeeded remarkably well in restoring, or in some instances (as in Russia and China) creating, the power of an economic elite...” (David Harvey, 2007) * Neoliberalism is an ideology, method of governance, and a set of policies which originated out of classical liberalism and as a backlash to Keynesianism during the early 1980’s (Steger and Roy 2010:10-11) * Neoliberal intellectuals insisted that the ‘free market’ was a superior mechanism for interactions, exchange and production, and promoted the extension of market mechanisms through the valorization and commercialization of many aspects of public and even private life. (Plehwe Dieter , Walpen Bernhard, and Neunhoffer Gisela. 2006.) * Developing, or recently developed nations were greatly disadvantaged by debt, disorder, and overall inequality that neoliberal policies and the World Bank and IMF’s structural adjustment programs imposed. * Introduction to International Development states, ‘while in the rich countries neoliberalism resulted in unprecedented rates of unemployment, poverty, inequality, and deindustrialization… its effects on the Third World were far worse” (Haslam, Schafer and Beaudet 2009:61)
An example of poor pro-market principles would be the East Asian Miracle of 1960-1990, and subsequent financial crisis, the neoliberalism doctrine of a minimalist role for government is highly ineffective, and the First World-oriented actions of the World Bank and IMF had disastrous results on development in the Global South. * A controversial component of neoliberalism is its dominant international use, and refers to a political-economic philosophy that de-emphasizes or rejects government intervention in the domestic economy. It focuses on free-market methods, fewer restrictions on business operations, and property rights. In foreign policy, neoliberalism favors the opening of foreign markets by political means, using diplomacy, economic pressure and, for some neoliberals, military might. (D. Roderick, F. Rodriguez. 2000) * Neoliberalism, though claiming to benefit everyone in the long run, realistically tends to favor the wealthy upper-class primarily due to the increased opportunities their corporations have for making profit in a free market. (DeLong, 1999)

* Associated initially Reagan and thatcher, for the past two decades neoliberalism has been the dominant global political economic trend adopted by political parties of the center and much of the traditional left as well as the right. These parties and the policies they enact represent the immediate interests of extremely wealthy investors and less than one thousand large corporations (McChesney, 1998)

* Any activity that might interfere with corporate domination of society is automatically suspect because it would interfere with the workings of the free market, which is advanced as the only rational, fair, and democratic allocator of goods and services. At their most eloquent, proponents of neoliberalism sound as if they are doing poor people, the environment, and everybody else a tremendous service as they enact policies on behalf of the wealthy few. (McChesney, 1998)

* The economic consequences of these policies have been the same just about everywhere, and exactly what one would expect: a massive increase in social and economic inequality, a marked increase in severe deprivation for the poorest nations and peoples of the world, a disastrous global environment, an unstable global economy and a unprecedented bonanza for the wealthy. (McChesney, 1998)

* In the end, neoliberals cannot and do not offer an empirical defense for the world they are making. To the contrary, they offer –no, demand- a religious faith in the infallibility of the unregulated market that draws upon the nineteenth century theories that have little connection to the actual world. (McChesney, 1998)

* Neoliberalism represents an era in which business forces are stronger and more aggressive, and face less organized opposition than ever before. In this political climate they attempt to codify their political power on every possible front, and as a result, make it increasingly difficult to challenge business—and next to impossible—for non-market, noncommercial, and democratic forces to exist at all. (McChesney, 1998)

* Neoliberalism works best when there is a formal electoral democracy, but when the population is diverted from the information, access, and public forums necessary for meaningful participation in decision-making.(“”)

* As neoliberal guru Milton Friedman put it in his capitalism and freedom, because profit making is the essence of democracy, any government that pursues anti-market is being antidemocratic, no matter how much informed popular support they might enjoy. Therefor it is best to restrict governments to the job of protecting private property and enforcing contracts, and to limit political debate to minor issues. (“”)

* Neoliberalism has been a political project concerned with institutional changes on a scale not seen since the immediate aftermath of the Second World War and a project that has attempted to transform some of the most basic political and economic settlements of the postwar era, including labor market accords, industrial relations systems, redistributive tax structures, and social welfare programs (Campbell, Pederson 2001)

* The concept of neoliberalism is more complex, diverse, contested, and open to interpretation than is often recognized. Neoliberalism is less a coherent totality, as is often assumed, than a loose conglomeration of institutions, ideas, and policy prescriptions from which actors pick and choose depending on prevailing political, economic, social, historical, and institutional conditions. The results can ne either contradictory or complementary, and often vary across as well as within countries. (Campbell, Pederson 2001)

* The truth is in between, rooted in the notion that neoliberalism does not so much involve deregulation as re-regulation of economic activity. (Campbell, Pederson 2001)

* States are much less incapacitated by the rise of neoliberalism than is often appreciated. Instead, states can block, adapt to, mediate, and in some cases even reverse neoliberal tendencies. (Campbell, Pederson 2001)

* Neoliberalism is itself a heterogeneous set of institutions consisting of various ideas, social and economic policies, and ways of organizing political and economic activity that are quite different from others. Ideally, it includes formal institutions, such as minimalist welfare state, taxation, and business-regulation programs; flexible labor markets and decentralized capital-labor relations unencumbered by strong unions and collective bargaining; and the absence of barriers to international capital mobility. (Campbell, Pederson 2001)

* Neoliberalism includes institutionalized normative principles favoring free market solutions to economic problems, rather than bargaining or indicative planning, and a dedication to controlling inflation even at the expense of full employment. (Campbell, Pederson 2001)

BIG MISTAKES OF NEOLIBERALISM * First the collapse of communism precipitated new experiments with neoliberalism as many new post communist governments distanced themselves from anything that resembled state economic intervention or planning. Poland’s shock therapy program in the early 1990s was perhaps the most dramatic example, but other countries engaged in similar experiments. Of course, international organizations, such as the International Monetary Fund and the World Bank, encouraged these efforts, much as they continued to do in Latin America and East Asia. (Greskovits 1998)

* Second, the Asian financial crisis in the late 1990s provoked much soul-searching among politicians and academics, some of whom had advocated neoliberalism earlier in order to promote economic development in the region but who in retrospect admitted publicly that more institutionally sensitive policies might have worked better.
(Kristof and Sanger 199)

* Finally recognition that neoliberal experiments in the advanced capitalist countries had contributed to rising unemployment, income inequality, and other problems generated increasing interest in the institutionalized discourse that continued to make neoliberalism so appealing politically despite its less attractive side effects
(Block 1996; Bourdieu 1998)

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